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Unfair Pay and Health

Author

Listed:
  • Armin Falk

    (Universität Bonn)

  • Fabian Kosse

    (University of Bonn)

  • Ingo Menrath

    (Heinrich Heine University, Department of Medical Sociology)

  • Pablo Emilio Verde

    (Heinrich Heine University, Department of Medical Sociology)

  • Johannes Siegrist

    (Heinrich Heine University, Department of Medical Sociology)

Abstract

This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative panel data. In a simple principal-agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents' heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control, and which has been shown to predict coronary heart disease in the long-run. Our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using observational data from a large representative panel data set. Complementary to our experimental findings we show a strong and significant negative association between unfair pay and health outcomes, in particular cardiovascular health.

Suggested Citation

  • Armin Falk & Fabian Kosse & Ingo Menrath & Pablo Emilio Verde & Johannes Siegrist, 2016. "Unfair Pay and Health," Working Papers 2016-015, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2016-015
    Note: IP
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    References listed on IDEAS

    as
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    Cited by:

    1. D'Ambrosio, Conchita & Clark, Andrew E. & Barazzetta, Marta, 2018. "Unfairness at work: Well-being and quits," Labour Economics, Elsevier, vol. 51(C), pages 307-316.
    2. Christian Pfeifer, 2015. "UnfairWage Perceptions and Sleep: Evidence from German Survey Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 135(4), pages 413-428.

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    More about this item

    Keywords

    fairness; social preferences; Inequality; heart rate variability; Health; experiment; SOEP;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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